A word to wise benefactors: endow, but verify

Posted: Dec 22, 2003 12:00 AM

'Tis the season to be charitable. It's a moral mandate for families with big bucks, who look for worthy objects of their philanthropy at the end of the year. It's a way to reward causes dear to their hearts and minds.

This year universities and colleges are particularly grateful (or should be) because in 2002 they suffered the first decline in such contributions in 15 years. The Council for Aid to Education says private gifts to institutions of higher education declined 1.2 percent to $23.9 billion. When a prosperous economy comes back into view, so may contributions.

But if you want to endow your favorite college, you should make sure your money is spent the way you say it should be spent. Endow, as Ronald Reagan might say, but verify. (Get a mean Philadelphia lawyer.) A bankable signature requires more than a little caution, and a lot of subsequent attention.

You could ask William Robertson and his two sisters, who are suing Princeton University for ignoring the wishes of their parents, who donated $39 million in 1961 with a clear understanding of how it was to be spent. That $39 million has grown to a stunning $525 million today, and the Robertson family is stunned by how Princeton has not lived up to the bargain.

The story behind the fight for control of the money is a cautionary tale for alumni, and a lesson in how small-minded university administrators can resort to legalisms when they decide they know better how to spend the money that others give.

In the year that John F. Kennedy urged fellow Americans to ask "not what your country can do for you, but what you can do for your country," Charles Robertson (Princeton '26), with his wife, applied the admonition to his old school and donated 700,000 shares of A & P stock to pay for establishing a graduate school with a single mission, to train men and women for careers for government service in international relations.

The Robertsons remained anonymous for a decade, testifying to the seriousness of their intention, with none of the vanity of the benefactors who want their names engraved in stone, literally. So trusting were the Robertsons that they allowed Princeton to appoint four of the seven trustees of the graduate school, limiting the Robertson family to three trustees. Not very smart, as it turns out.

Today the Robertson endowment mostly pays for Princeton's Woodrow Wilson School of Public and International Affairs, providing all of the tuition money for students with no particular interest in international affairs. Last year only three of the 63 graduates took such government jobs.

Princeton's records show that over a 20 year period only 200 of the 1,720 students who received master of public administration degrees - fewer than 12 percent of the enrollment - went into the jobs the Robertsons specified. That comes to $1.25 million for each graduate. The cost of a college education has not gone up that much, even at Princeton.

The Robertson heirs are particularly aggrieved that 13 million of their dollars paid for the construction of Wallace Hall, which the Woodrow Wilson School shares with the Sociology Department, the Office of Population Research and the Center for Research on Child Wellbeing.

Insulting the benevolence, the university now wants to fold the Robertson Foundation into its $8.3 billion endowment (the third largest university endowment, after Harvard's and Yale's). Princeton insists it can keep the family endowment separate, no doubt in the manner in which they treated the rest of the money.

The university argues that its four trustees have followed the letter of the law. The Robertson family argues that it failed the spirit of the law as envisioned by their parents. Before Charles Robertson died in 1981, he wrote to Princeton of his disappointment in the university's failure to encourage and support students to pursue his ideals.

In 1996, Paul Volcker, the former chairman of the Federal Reserve Board and a visiting professor at the Woodrow Wilson School, described the graduate program as an "intellectual hodgepodge despite all the resources committed, without clear focus or professional mission."

The fulfillment of the goals of the Robertsons is as crucial today as it was when they initiated them. The war against terror requires educated men and women to enter government service. This is not a liberal or a conservative issue, but it is an ethical one of national interest.

The courts will ultimately decide whether Princeton failed to honor its word to the Robertsons, and the precedent will send a loud message to potential benefactors over how (or whether) they should extend their generosity to universities.

Trending Townhall Video